LITHIA MOTORS INC (LAD) Stock Fundamental Analysis
NYSE:LAD - New York Stock Exchange, Inc. - US5367971034 - Common Stock - Currency: USD
Overall LAD gets a fundamental rating of 5 out of 10. We evaluated LAD against 122 industry peers in the Specialty Retail industry. While LAD is still in line with the averages on profitability rating, there are concerns on its financial health. LAD is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year LAD was profitable.
In the past year LAD had a positive cash flow from operations.
Each year in the past 5 years LAD has been profitable.
In multiple years LAD reported negative operating cash flow during the last 5 years.
1.2 Ratios
With a decent Return On Assets value of 3.62%, LAD is doing good in the industry, outperforming 61.48% of the companies in the same industry.
With a decent Return On Equity value of 12.56%, LAD is doing good in the industry, outperforming 69.67% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.71%, LAD is in line with its industry, outperforming 59.02% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LAD is below the industry average of 12.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROIC | 5.71% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
1.3 Margins
LAD's Profit Margin of 2.31% is in line compared to the rest of the industry. LAD outperforms 59.84% of its industry peers.
In the last couple of years the Profit Margin of LAD has remained more or less at the same level.
The Operating Margin of LAD (4.49%) is better than 64.75% of its industry peers.
In the last couple of years the Operating Margin of LAD has grown nicely.
LAD has a worse Gross Margin (15.39%) than 86.89% of its industry peers.
In the last couple of years the Gross Margin of LAD has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% |
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
LAD has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
LAD has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, LAD has more shares outstanding
The debt/assets ratio for LAD is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.51 indicates that LAD is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.51, LAD perfoms like the industry average, outperforming 54.92% of the companies in the same industry.
LAD has a debt to FCF ratio of 116.40. This is a negative value and a sign of low solvency as LAD would need 116.40 years to pay back of all of its debts.
LAD's Debt to FCF ratio of 116.40 is in line compared to the rest of the industry. LAD outperforms 45.08% of its industry peers.
A Debt/Equity ratio of 1.95 is on the high side and indicates that LAD has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.95, LAD is doing worse than 68.85% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Altman-Z | 2.51 |
ROIC/WACC0.64
WACC8.89%
2.3 Liquidity
A Current Ratio of 1.18 indicates that LAD should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.18, LAD is doing worse than 60.66% of the companies in the same industry.
LAD has a Quick Ratio of 1.18. This is a bad value and indicates that LAD is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.31, LAD is not doing good in the industry: 70.49% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
The earnings per share for LAD have decreased by -8.64% in the last year.
LAD shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.64% yearly.
LAD shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.81%.
LAD shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 23.35% yearly.
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
3.2 Future
LAD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.95% yearly.
Based on estimates for the next years, LAD will show a small growth in Revenue. The Revenue will grow by 7.69% on average per year.
EPS Next Y11.55%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
EPS Next 5Y13.95%
Revenue Next Year4.76%
Revenue Next 2Y5.5%
Revenue Next 3Y6.43%
Revenue Next 5Y7.69%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.13, the valuation of LAD can be described as reasonable.
Based on the Price/Earnings ratio, LAD is valued cheaper than 85.25% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.69, LAD is valued rather cheaply.
The Price/Forward Earnings ratio is 8.45, which indicates a very decent valuation of LAD.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LAD indicates a rather cheap valuation: LAD is cheaper than 90.98% of the companies listed in the same industry.
LAD's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 37.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.13 | ||
| Fwd PE | 8.45 |
4.2 Price Multiples
LAD's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LAD is cheaper than 65.57% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as LAD.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 72.73 | ||
| EV/EBITDA | 8.38 |
4.3 Compensation for Growth
LAD's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as LAD's earnings are expected to grow with 12.89% in the coming years.
PEG (NY)0.88
PEG (5Y)0.49
EPS Next 2Y12.3%
EPS Next 3Y12.89%
5. Dividend
5.1 Amount
LAD has a yearly dividend return of 0.72%, which is pretty low.
LAD's Dividend Yield is a higher than the industry average which is at 5.06.
Compared to an average S&P500 Dividend Yield of 2.34, LAD's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
On average, the dividend of LAD grows each year by 11.85%, which is quite nice.
LAD has been paying a dividend for at least 10 years, so it has a reliable track record.
LAD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.85%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
6.67% of the earnings are spent on dividend by LAD. This is a low number and sustainable payout ratio.
LAD's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP6.67%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
319.38
+4.92 (+1.56%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners110.69%
Inst Owner Change-0.83%
Ins Owners0.87%
Ins Owner Change-0.52%
Market Cap8.31B
Analysts84
Price Target403.36 (26.29%)
Short Float %6.26%
Short Ratio6.88
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
Yearly Dividend2.1
Dividend Growth(5Y)11.85%
DP6.67%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.5%
Min EPS beat(2)-1.6%
Max EPS beat(2)6.59%
EPS beat(4)3
Avg EPS beat(4)5.72%
Min EPS beat(4)-1.6%
Max EPS beat(4)10.88%
EPS beat(8)4
Avg EPS beat(8)0.76%
EPS beat(12)4
Avg EPS beat(12)-1.45%
EPS beat(16)8
Avg EPS beat(16)6.82%
Revenue beat(2)1
Avg Revenue beat(2)-1%
Min Revenue beat(2)-2.33%
Max Revenue beat(2)0.33%
Revenue beat(4)1
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.33%
Revenue beat(8)2
Avg Revenue beat(8)-1.55%
Revenue beat(12)2
Avg Revenue beat(12)-1.99%
Revenue beat(16)6
Avg Revenue beat(16)0.34%
PT rev (1m)2.75%
PT rev (3m)-8.58%
EPS NQ rev (1m)-0.24%
EPS NQ rev (3m)-5.13%
EPS NY rev (1m)-0.32%
EPS NY rev (3m)-6.5%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-1.37%
Revenue NY rev (1m)-0.25%
Revenue NY rev (3m)-2.15%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.13 | ||
| Fwd PE | 8.45 | ||
| P/S | 0.23 | ||
| P/FCF | 72.73 | ||
| P/OCF | 18.28 | ||
| P/B | 1.23 | ||
| P/tB | 5.14 | ||
| EV/EBITDA | 8.38 |
EPS(TTM)31.53
EY9.87%
EPS(NY)37.81
Fwd EY11.84%
FCF(TTM)4.39
FCFY1.37%
OCF(TTM)17.47
OCFY5.47%
SpS1413.93
BVpS259.62
TBVpS62.17
PEG (NY)0.88
PEG (5Y)0.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.62% | ||
| ROE | 12.56% | ||
| ROCE | 9.81% | ||
| ROIC | 5.71% | ||
| ROICexc | 5.78% | ||
| ROICexgc | 7.59% | ||
| OM | 4.49% | ||
| PM (TTM) | 2.31% | ||
| GM | 15.39% | ||
| FCFM | 0.31% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
ROICexc(3y)7.8%
ROICexc(5y)8.76%
ROICexgc(3y)10.26%
ROICexgc(5y)11.04%
ROCE(3y)12.38%
ROCE(5y)13.83%
ROICexcg growth 3Y-22.88%
ROICexcg growth 5Y-1.28%
ROICexc growth 3Y-24.14%
ROICexc growth 5Y-3.26%
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
F-Score5
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 116.4 | ||
| Debt/EBITDA | 6.75 | ||
| Cap/Depr | 114.61% | ||
| Cap/Sales | 0.93% | ||
| Interest Coverage | 2.23 | ||
| Cash Conversion | 23.32% | ||
| Profit Quality | 13.46% | ||
| Current Ratio | 1.18 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 2.51 |
F-Score5
WACC8.89%
ROIC/WACC0.64
Cap/Depr(3y)135.76%
Cap/Depr(5y)158.69%
Cap/Sales(3y)0.93%
Cap/Sales(5y)1.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-8.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%25.37%
EPS Next Y11.55%
EPS Next 2Y12.3%
EPS Next 3Y12.89%
EPS Next 5Y13.95%
Revenue 1Y (TTM)12.81%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%7.27%
Revenue Next Year4.76%
Revenue Next 2Y5.5%
Revenue Next 3Y6.43%
Revenue Next 5Y7.69%
EBIT growth 1Y-2.36%
EBIT growth 3Y-1.94%
EBIT growth 5Y26.57%
EBIT Next Year17.38%
EBIT Next 3Y14.11%
EBIT Next 5Y11.53%
FCF growth 1Y111.82%
FCF growth 3Y-63.67%
FCF growth 5Y-28.69%
OCF growth 1Y166.36%
OCF growth 3Y-38.16%
OCF growth 5Y-4.12%